[Code of Federal Regulations]

[Title 31, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 31CFR903.2]



[Page 971]

 

                  TITLE 31--MONEY AND FINANCE: TREASURY

 

   CHAPTER IX--FEDERAL CLAIMS COLLECTION STANDARDS (DEPARTMENT OF THE 

                    TREASURY--DEPARTMENT OF JUSTICE)

 

PART 903_STANDARDS FOR SUSPENDING OR TERMINATING COLLECTION ACTIVITY

--Table of Contents

 

Sec. 903.2  Suspension of collection activity.



    (a) Agencies may suspend collection activity on a debt when:

    (1) The agency cannot locate the debtor;

    (2) The debtor's financial condition is expected to improve; or

    (3) The debtor has requested a waiver or review of the debt.

    (b) Based on the current financial condition of the debtor, agencies 

may suspend collection activity on a debt when the debtor's future 

prospects justify retention of the debt for periodic review and 

collection activity and:

    (1) The applicable statute of limitations has not expired; or

    (2) Future collection can be effected by administrative offset, 

notwithstanding the expiration of the applicable statute of limitations 

for litigation of claims, with due regard to the 10-year limitation for 

administrative offset prescribed by 31 U.S.C. 3716(e)(1); or

    (3) The debtor agrees to pay interest on the amount of the debt on 

which collection will be suspended, and such suspension is likely to 

enhance the debtor's ability to pay the full amount of the principal of 

the debt with interest at a later date.

    (c)(1) Agencies shall suspend collection activity during the time 

required for consideration of the debtor's request for waiver or 

administrative review of the debt if the statute under which the request 

is sought prohibits the agency from collecting the debt during that 

time.

    (2) If the statute under which the request is sought does not 

prohibit collection activity pending consideration of the request, 

agencies may use discretion, on a case-by-case basis, to suspend 

collection. Further, an agency ordinarily should suspend collection 

action upon a request for waiver or review if the agency is prohibited 

by statute or regulation from issuing a refund of amounts collected 

prior to agency consideration of the debtor's request. However, an 

agency should not suspend collection when the agency determines that the 

request for waiver or review is frivolous or was made primarily to delay 

collection.

    (d) When an agency learns that a bankruptcy petition has been filed 

with respect to a debtor, in most cases the collection activity on a 

debt must be suspended, pursuant to the provisions of 11 U.S.C. 362, 

1201, and 1301, unless the agency can clearly establish that the 

automatic stay has been lifted or is no longer in effect. Agencies 

should seek legal advice immediately from their agency counsel and, if 

legally permitted, take the necessary legal steps to ensure that no 

funds or money are paid by the agency to the debtor until relief from 

the automatic stay is obtained.